Hathway Cable’s ARPU, placement revenue, content cost in Q2

MUMBAI: Hathway Cable & Datacom’s cable TV ARPU (average revenue per user) in Phase III areas of digital addressable system (DAS) has increased to Rs 30 in the fiscal second quarter, from Rs 25 in the preceding quarter.

The multi-system operator (MSO) expects ARPU in DAS Phase III to land in the region of Rs 50–60 by the end of this fiscal year.

For Phase I, the ARPU in the exit quarter of FY17 is expected to be between Rs 115 and Rs 120. Cable TV ARPU in DAS Phase II should end lower than that in Phase I by Rs 7–10.

Hathway’s standalone ARPU for Phases I and II stands at respectively Rs 105 and Rs 90, as of 30 September 2016.

In the fiscal second quarter, Hathway deployed 800,000 set-top boxes (STBs) at consolidated level in Phases III and IV, thus taking its digital subscriber base to 11.8 million. With this, the MSO has digitised 92% of its cable TV universe.

Hathway’s total DAS Phase III subscriber base has reached 5.6 million. In Phases I and II, the company has 2.3 million and 4 million STBs respectively.

The company has an inventory of 560,000 STBs in the standalone company. The stockpile used to be 1.2 million until 31 March 2016.

Hathway deployed capital expenditure of Rs 175 crore (Rs 1.75 billion) at the standalone level in the first half of this fiscal year, out of which broadband consumed Rs 130 crore and cable TV Rs 45 crore.

“Cable TV capex has been low as most of the STBs were imported last year. There was a stockpile of STBs that got deployed this year. A small number of HD boxes were imported this year,” an analyst tracking the company said.

Hathway’s standalone company has a population of 140,000 HD subscribers.

Having stitched net of content deals (content cost minus carriage revenue) with broadcasters like Star India and Zee, Hathway’s placement revenue came down by Rs 20 crore in the quarter ended 30 September 2016. Placement revenue fell to Rs 65.4 crore from Rs 84.8 crore in the earlier year.

Pay channel cost stood at Rs 103.4 crore in Q2 of FY17 compared to Rs 84.6 crore a year ago. Pay channel cost included content costs for existing and new markets for Phase III.

Overall, content cost stands at Rs 30 per subscriber for the second quarter, in line with the trailing quarter. In the year-ago period, content cost was Rs 26 per subscriber.

The MSO will roll out Hathway Connect platform for local cable operators (LCOs) in North India and parts of central India. The plan is to have the entire DAS I and II markets on Hathway Connect with the new packaging, which is thought to help boost ARPU.

Hathway Connect is an online portal for the LCOs. The mobile app facilitates a series of features to LCOs such as ‘balance management’ including instant top-up of his online account with immediate credit, ‘pack management’ (renew pack, add new packs, or change existing packs), bulk renewal and activation of packs in almost real time, managing and monitoring of ground collections through field executives.

The second quarter of FY17 saw Hathway Connect expand its footprint to pockets in central India and Rajasthan. The platform’s coverage increased to 56% for Phases I and II.